INSIGHT ISSUE 01 | 2021

21 INSIGHT | Tracking the Future Aleyn Smith-Gillespie Associate Director, Carbon Trust An increasing number of countries are setting targets to reduce their carbon emissions to zero, requiring innovation across the economy. Many companies are not waiting for government, and are setting their own net zero goals for 2050. What is the future of green industry? An increasing number of countries are setting net zero targets. Meeting these will require unprecedented innovation across the economy and this is especially the case in traditionally energy intensive industries. As the deployment of renewable electricity and biomass sourced fuels and plans to develop clean hydrogen accelerate, it is clear that all have a role to play in reducing, and ultimately eliminating, industrial carbon emissions. Improving efficiency and decarbonising energy use within industrial and manufacturing sectors is critical to addressing the demand-side aspects of the energy transition. Capital investments made over the next two or three years will lock in energy use for the next 10-20 years or more, so it is vital that new technology is implemented rapidly and at scale. Programmes, such as the UK Government’s BEIS Industrial Energy Efficiency Accelerator, are demonstrating how innovators are going to be playing an increasingly important role in helping industry deliver on net zero aspirations. From the perspective of energy production and distribution, countries need a smart and flexible energy system, one that has the ability to effectively match demand and supply. This can be achieved through technologies like demand-side response, energy storage, flexible generation and interconnectors. Our analysis has highlighted that, for example in the UK, deploying these technologies delivers significant cost reduction potential – up to £40bn by 2050 – whilst also reducing carbon emissions. The Carbon Trust is now leading a project, alongside Imperial College, that is investigating the role of a flexible energy system in achieving a net zero economy with findings expected in Spring 2021.